For most families, a home is the biggest purchase they will ever make. A home loan spreads that cost over up to 30 years, and because the property itself secures the loan, home loans carry some of the lowest interest rates available to individuals.
How much can you borrow?
Two things decide your loan amount: the property's value and your repayment capacity.
RBI caps the loan-to-value (LTV) ratio — the share of the property's value a lender can finance:
| Loan amount | Maximum LTV |
|---|---|
| Up to ₹30 lakh | 90% |
| ₹30 lakh to ₹75 lakh | 80% |
| Above ₹75 lakh | 75% |
So you will need a down payment of at least 10–25%, plus stamp duty and registration, which lenders generally do not fund.
Your repayment capacity is judged by income, existing EMIs, age and credit score. Adding an earning co-applicant — a spouse or parent — can raise your eligibility.
Fixed or floating rate?
- Floating rates are linked to an external benchmark (such as the RBI repo rate) and move with it. Most Indian home loans are floating.
- Fixed rates stay constant for a period, then usually convert to floating.
A key advantage of floating rates: RBI does not allow lenders to charge foreclosure or prepayment penalties on floating-rate loans to individual borrowers for non-business purposes. That makes part-prepayments a powerful way to cut your interest bill.
Types of home loans
- Home purchase — ready or under-construction flats and houses
- Construction — disbursed in stages as you build on your own plot
- Plot loan — to buy a residential plot
- Home improvement / extension
- Balance transfer — move your loan to a lender with a lower rate
- Top-up — extra funds on an existing home loan
Documents
PAN and Aadhaar; salary slips or ITRs; 6 months' bank statements; and property papers — sale agreement, title documents, approved plan and, for resale, the chain of previous sale deeds. The lender will run its own legal and technical (valuation) checks.
Tax benefits
Under the old income-tax regime, the principal and interest you repay on a home loan can qualify for deductions, subject to the limits in force. The new default regime does not offer these deductions for a self-occupied home. Check with your tax advisor which regime suits you.
Our tips
- Get the property's title verified before paying any booking amount.
- Compare the spread over the benchmark, not just today's rate.
- Keep your total EMIs within about half your take-home pay.
- Read the lender's Key Fact Statement for every fee before you sign.
Kredistar compares home loan offers from leading banks and housing finance lenders on our panel — free. Explore home loans or calculate your EMI.
This article is for general information only and is not financial, legal or tax advice. Loan terms are set by the lender. Kredistar Finserv Pvt. Ltd. is a DSA and loan aggregator, not a lender.